UPS sinks as worries about delivery demand overshadow strong earnings beat
UPSshares were dragged lower by 9% on Tuesday following the company's quarterly earnings report.
logisticsheavyweight said average daily package volume in the US fell by 2.9%, stoking slowdown concerns.
- Adjusted earnings of $3.06 per share beat the FactSet estimate of $2.80 per share
UPS shares dropped to a three-month low Tuesday as investors keyed in on cooling in package deliveries in the US during the second quarter as the logistics heavyweight turned in profit and sales growth that were ahead of expectations.
The company late Monday said consolidated revenue rose by 14.5% to $23.4 billion, higher than the $23.2 billion expected by analysts polled by FactSet.
Revenue in the US climbed by 10% to $14.4 billion, aided by a price per piece increase of 13.4%. But the report also said US average daily package volume fell by 2.9% during the three months ended June 30.
UPS stock fell as much as 9% to $190.27, the lowest price since April 27. The stock pared the loss to 8.3% during the session during which trading volume was heavy with more than 7.8 million shares exchanged by midday.
The company also posted a 15.8% decline in average daily volume shipments from business to residential locations.
UPS experienced a boom in package deliveries a year ago as the
The company's adjusted earnings of $3.06 per share beat the FactSet estimate of $2.81 per share. The latest quarter also showed a 30% rise in international revenue to $4.8 billion.
UPS backed its estimate of $4 billion in planned expenditures for 2021.
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